Can You Transfer an IRA? Rules, Timing, and RMDs

To transfer an IRA from one financial institution to another, open an account of the same type at the receiving institution and ask it to initiate a trustee-to-trustee transfer. The old custodian sends the assets directly to the new one, you never take possession of the money, and the move is tax-free with no limit on how often you can do it.¹

Why a Direct Transfer Is Safer Than a Rollover

The IRS treats a trustee-to-trustee transfer and an indirect rollover as two different transactions, and the difference has real tax consequences. In a transfer, the money moves directly between institutions. Because no distribution is made to you, there is no tax reporting, no withholding, and no waiting period.¹

In an indirect rollover, the old custodian sends you a check or deposits the funds into your bank account, and you have 60 days to get the full amount into another IRA or eligible retirement plan.² Miss the deadline and the IRS treats the whole amount as a taxable distribution. If you are under 59½, add a 10 percent early withdrawal penalty on top of the income tax.³

Withholding is another reason to keep the money out of your hands. IRA distributions carry a default 10 percent voluntary federal withholding, which you can waive. Distributions from an employer plan like a 401(k) come with a mandatory 20 percent withholding even if you intend to complete the rollover.⁴ A direct transfer sidesteps withholding entirely because nothing is distributed.

Same Type to Same Type

A transfer has to land in the same kind of account it left. Traditional to Traditional, Roth to Roth. A SEP IRA is legally a Traditional IRA and follows the same rules.⁵ Moving Traditional money into a Roth is a conversion, not a transfer, and it is a taxable event.

The SIMPLE IRA Two-Year Rule

If you hold a SIMPLE IRA, watch the calendar. For the first two years after you first participate in the employer’s SIMPLE plan, you can only transfer the assets to another SIMPLE IRA. Move the money to a Traditional IRA or any other non-SIMPLE account within that window and the IRS treats it as a distribution subject to a 25 percent additional tax, higher than the standard early withdrawal penalty.⁶ After two years, SIMPLE money can transfer to a Traditional IRA tax-free.

Moving IRA Money Into a 401(k)

Pre-tax Traditional IRA funds can go into a 401(k) or 403(b) if the employer’s plan accepts incoming rollovers, and this direction is exempt from the one-rollover-per-year limit.² After-tax (nondeductible) contributions cannot go into a workplace plan. Confirm with your plan administrator before starting, because not every plan accepts rollovers in.

Steps to Complete the Transfer

Open the receiving IRA first if you don’t already have one. The new custodian provides a transfer request form, sometimes called a transfer initiation form, and drives the process from there. You’ll need:

Account numbers for both the existing and the new IRA.
The legal name and address of the institution currently holding your IRA.
Your Social Security number, and often a recent statement from the current custodian.
Whether you’re moving the full balance or a partial amount. For a partial transfer, specify the dollar amount, share count, or particular securities.

Confirm on the form that the transaction is a trustee-to-trustee transfer, not a rollover or distribution. Once you submit it, the new custodian contacts the old one and requests the assets. The old custodian either wires cash, sends a check payable to the new institution for your benefit, or moves securities electronically.

Some custodians require a Medallion Signature Guarantee on higher-value transfers. This is a specialized stamp that verifies your identity, distinct from a standard notarization, and you can usually get one at a bank or credit union where you already have an account. If the guarantee is required and missing, the current custodian will reject the paperwork.

What Won’t Transfer In Kind

Not every holding can move as-is. Proprietary mutual funds, meaning funds offered only by one institution, generally cannot be held elsewhere. The current custodian will liquidate those shares and send the cash instead. The same is true of certain annuity contracts and other institution-specific investments. Ask the new custodian which of your holdings can transfer in kind and which will have to be sold before you start.

How Long It Takes

Most brokerage-to-brokerage transfers run through the Automated Customer Account Transfer Service (ACATS), an electronic system that standardizes the movement of securities between firms.⁷ A clean ACATS transfer typically takes six to ten business days.⁸ Delays usually come from mismatched account information, assets that must be liquidated first, or a missing signature guarantee.

All-cash transfers, like proceeds from a maturing bank IRA CD, depend on the institutions and the method used. Some finish in under a week. Track progress on both accounts and follow up with the sending custodian if nothing has moved after two weeks.

How Often You Can Transfer

There is no cap on trustee-to-trustee transfers. Move your IRA between institutions as many times as you want in a year.¹

The frequency limit only applies to indirect rollovers. Across all your IRAs combined, you get one indirect rollover in any 12-month period, and the IRS treats your Traditional, Roth, SEP, and SIMPLE IRAs as a single IRA for this purpose.² The clock starts on the date you receive the distribution, not the date you redeposit it. A second indirect rollover inside that window becomes taxable income.

Exempt from the one-per-year limit: trustee-to-trustee transfers, Roth conversions, IRA-to-employer-plan rollovers, and rollovers from employer plans to IRAs.²

If You Are Taking RMDs

Once you reach age 73, required minimum distributions kick in for Traditional, SEP, and SIMPLE IRAs.⁹ Your first RMD is due by April 1 of the year after you turn 73; each one after that is due by December 31.

An RMD can’t be rolled over or transferred into another tax-deferred account. It has to come out as a distribution. If you’re transferring in an RMD year, coordinate the timing: take the RMD before starting the transfer, or take it from the new account after the transfer settles, as long as the full amount is out by the annual deadline. If you own several Traditional IRAs, you calculate the RMD for each but can take the total from any one or combination of them.¹⁰

Missing the RMD deadline triggers an excise tax of 25 percent on the shortfall, dropping to 10 percent if you correct it within two years.¹¹

Inherited IRAs

An inherited IRA can move to a new custodian by trustee-to-trustee transfer, but the rules differ from moving your own account. A non-spouse beneficiary cannot roll inherited IRA funds into their own IRA. The inherited account must stay titled in the name of the deceased original owner for your benefit, and any transfer must preserve that titling.¹⁰

For most non-spouse beneficiaries who inherited from someone who died in 2020 or later, the entire account must be emptied by the end of the tenth year after the owner’s death.¹² Moving the account to a different custodian does not restart or change the 10-year clock. Eligible designated beneficiaries, including a surviving spouse, a minor child of the deceased, someone disabled or chronically ill, and someone not more than 10 years younger than the deceased, may have different options, including stretching distributions over their own life expectancy.

A surviving spouse has the most flexibility and can transfer the inherited IRA into their own IRA, treating it as their own account going forward under their own age and RMD schedule.

Transfers in a Divorce

IRA assets can move tax-free to a spouse or former spouse under a divorce decree or separation agreement. The transferred portion becomes the receiving spouse’s own IRA from that point on, not a distribution to the original owner.¹³ The transfer has to be made under a divorce or separation instrument. Handing part of your IRA to a spouse without a court order will not qualify for tax-free treatment.

How the IRS Sees a Transfer

A direct trustee-to-trustee transfer between two IRAs of the same type generally produces no tax paperwork. The sending custodian does not issue a Form 1099-R, and the receiving custodian does not report the incoming funds on Form 5498, because no distribution occurred.¹⁴ From the IRS’s view, the money never left a tax-advantaged account.

Reporting does apply to other movements. A direct rollover from a 401(k) to an IRA is reported on Form 1099-R by the plan using distribution code G, with the receiving IRA custodian reporting the incoming rollover on Form 5498. A Roth conversion is reported on Form 1099-R even when done as a trustee-to-trustee movement, because the conversion itself is taxable.¹⁴ If you complete an indirect rollover, the distributing custodian issues a Form 1099-R and you report the rollover on your tax return to show the amount is not taxable. Hold on to records of dates and amounts in case the IRS ever questions the timing.

1
Internal Revenue Service. Publication 590-A (2025), Contributions to Individual Retirement Arrangements (IRAs)
2
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
3
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
4
Internal Revenue Service. 401(k) Resource Guide Plan Participants General Distribution Rules
5
Internal Revenue Service. Retirement Plans FAQs Regarding SEPs
6
Internal Revenue Service. SIMPLE IRA Withdrawal and Transfer Rules
7
U.S. Securities and Exchange Commission. Transferring Your Brokerage Account – Tips on Avoiding Delays
8
FINRA. Report of the Customer Account Transfer Task Force
9
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
10
Internal Revenue Service. Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)
11
Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
12
Internal Revenue Service. Retirement Topics – Beneficiary
13
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
14
Internal Revenue Service. Instructions for Forms 1099-R and 5498